jobless claims, sovereign debt issues. you put it all together and you have a bit of a decline. first, number of traders mentioned to me that the press secretary, robert gibbs made comments earlier in the day that there could be bigger' visions to the jobs report out tomorrow than some people expected. there are going to be job revisions reports for 2007 and 2008, they could be fairly significant. that's making the rounds right now. one trader said to me, are you hanging your hat on the u.s. employment market right now? a little bit of cynicism about that. the second thing is greece. i have heard greece described as the new subprime. how do you price sovereign risk? a lot of people underestimated what was going on with subprime. they said it's not an issue because it was a small part of the market, turned out they were right. they didn't understand the containing en aspects. that's why it's been associated with greece. yes, greece is small. we're not going to make the same mistake this time. that's what i kept hearing all

day. let's move forward and show you some of the high volume movers. that's the way you want to look at this. when you have a down day, look where people are trading big volume. gld heading towards 2 1/2 times the normal volume, big decline ins the gold group today. take a look at some of the other ones, how about financial etf which is the sector etf for financial stocks. that's more than a full day's volume and probably towards 160% of the volume. mergeing markets, we've been talking about the effect on brazil and the eem is your standard bearer here. that has had much more than a full day's volume. we'll probably get another 150% towards the end of the day. unusual for japan's index, ewj is the similar bowl, very significant vol yul. i don't often see that. i thought i would point it out. you want to look for levels on the s&p 500. a classic direction, a 10% move from the highs. january 19th was 11.50.

therefore, the correction level is 1035, 35 points away from that. trader talk.cnbc.com. >> off the lows, but not by a whole lot. we're basically five to one declines against advanceses. one interesting thing to point is new lows far outpacing new highs today. well, it's a down day. that would be the case. on a lot of down days, it has not been the case. we're seeing a lot more stocks getting close to those lows. take a look at a few big cap names, research in motion down 2.4%, apple down 3%. google down 2.3%. cisco has given away .2 in the last few minutes. strong ner the last hour. everyone talking about john chambers and how bullish he is and what he sees with the recovery. that stock very much outpacing the rest of the market. we talked earlier about how the

chips may have turned the corner. so much need for them across the world. philly semi conductor index down, intel, rambus, all getting hit pretty hard. we haven't talked really about the airlines. i want to take a look ality jetblue, said their traffic in january was up. it was strong, but down 4%. uaua down 6.7%, analyst down grades there as well. let's have a little bright spot here. it's been a tough day. two names you don't talk about much amerco up 6 points. we'll take little more of a sector by sector look and also the broader look at the nasdaq which has underperformed the s&p 500 and dow jones industrial average in 2010. we deal that after the close. let's go to sharon epperson at the nymex.

>> commodities have underperformed by a wide margin, selling off not only oil and gold, but copper and grains across the board in the sector. oil prices are down $4.00 below $73 a barrel. today markets the biggest percentage decline we've seen since july. we've broken through key technical levels and many analysts say there's not much support between this level and $70 a barrel. the crp index gives you a good idea of what has happened to many commoditys to day, includes energies, metals, grains, meats. we are looking at the dollar index that has risen to the 80 level causing the selloff in commodities across the board. the biggest selloff was in metals, gold prices down about $50, silver down 5%, also looking at palladium down and platinum down significantly with the toyota problems adding to their woes. what has cause thd major selloff in the metals has a lot to do with technical selling, but also

keep in mind this risk trade that so many folks were so excited about has seemed to have gone away very quickly and also it's a very big break here in terms of the selling that we're seeing, more margin selling, perhaps, could ensue tomorrow. george of rbc pointing out more sales stops may be entered when china and other major buyers are holding off on buying metals right now. rick, over to you in chicago. >> thank you, sharon. yeah, $50 in gold,out don't see that very often. if you look at the biggest, freshest news in the credit markets, it's happening right now. kraft is launching the much expected $9.5 multi maturity deal. according to my buddies, the deal is going to be coming in potentially a little wider than the early talk. why is that important? because of all the credit issues today, we're going to be watching these price sings like a hawk. as far as the rest of the marketplace, you know the main

dynamics, let's look at it from the specifics. the your roe currency over a year or the pound over a year against the greenback. worst levels since may of last year. what makes matters even more interesting is their effects on things like gold and oil because obviously i can't think that the dynamics of the energy demand and supply are changing this quickly. it underscores the big presence of dollar strength imbedded that process. the last chart, two-day chart of ten-year note rates, and even though many sovereign spreads overseas are widening, meaning places like greece, their bonds are moving much high ner yield down in price in the u.s. and even in the boone, the european tenure, their rates are moving down in this kind of quasi flight to quality. maria back to you. >> thanks very much. we saw earlier the chart of cisco, one of the few bright spots on the upside. retail also doing okay. 96% of the s&p 500 is lower with the market taking a dive.

joining us is tim freeman, head of u.s. equity derivative sales at capstone markets. always wonderful to have you on the program. do you recall the commercial break you said you don't want to get in front of the selloff, it's going to keep on going. you said the risks is to the downside. what do you mean? tell us more about that. >> we hit roughly the 1075 area in the s&p on friday. we had a rally off that. today we broke to a new low. technically, the market doesn't look like it's ready to bottom out. we have a big fundamental catalyst with the payroll number. when i get this thing playing out ahead of the big number, i wouldn't try to get in the way oift. my gut tells me you'll get a better entry point over the next couple weeks. >> tim? >> too much structural risk, particularly the sovereign date. i do believe the sovereign debt is a significant problem. it's a game change ner this marketplace. if i were play ag portfolio, i would be hedging my portfolio with s&p options.

>> scott, in davos they were saying the sovereign debt issue is not just focused on the emerging markets, but developed markets, japan, u.s., britain, all sort of out there, not necessarily watching for a default, but problems because of all the debt on the balance sheets of government. >> fear is contagious as well, certainly when you talk about sovereign debt. it's everything into a basket, worries out of china, fears out of washington. volatility today is up about 18%. tim, you're watching the flows. what does that tell you about the near-term direction of this market? >> the markets have been very interesting. we've seen a spike in volatility in the short term. but we haven't seen as much depreciation in longer-dated options. that tells me the market -- they're trying to chew through this information. they don't understand the true ramifications of it and they're taking it piece by piece. they're hedging, buying shorter data options to protect

portfolios, they're selling longer dated options to help finance those positions. >> does that mean, alec, you see this as more of a short-term correction rather than a bear market that we're in or entering? >> our core belief is this is going to be a correction. we haven't had a 10% correction since last march. we still have a way to go to get there. we think it will be confined to that. over the next couple weeks as this correction keeps unfolding, i think one of the reasons that this sovereign thing could get worse before it gets better, it comes against the backdrop where you had tremendous rallies in credit. investment grade, corporate, emerging markets, sovereign. the credit markets are priced to perfection. then you get this monkey wrench in the worksality a time when things aren't priced for a lot of risk. i think that gives legs to the sell on sovereign risk story. >> how do i protect myself? we see a market going down across the board. 96% of the s&p down today. you think it's continuing in the coming weeks possibly. what do i want to do for my own

portfolio to protect myself? >> strategies we look at, volatility is very expensive here. we would expect it to come in as the market settles down. we'll see what number we get tomorrow. trades we like would be selling shorter term volatility to finance that. again, we don't believe the market is going to continue to take and plot volatilities out at the curb. this market settles down, those volatilities and option premiums will come out of the curve. help finance it so it's not quite so expensive. >> if you're more of a one-only investor, we would stay with lower bid areas. u.s., japan, switzerland, all doing much better than almost anything else. defensive sectors, health care, staples, definitely stay defensive. >> how about emerging markets? this has been the winner off the last year? >> over the short term, there's no such thing as defensive in an emerging market. >> good point. >> as long as we're in this

increased risks aversion environment i would expect emerging equity to keep underperforming. >> tim, alec, good to see you. meantime new york attorney general andrew cuomo is suing bank of america and former ceo ken lewis over the merger with merrill lynch. >> cuomo alleges the bank, its former ceo and cfo joe price duped shareholders into supporting the $50 billion acquisition of merrill back in 2008. all three parties face civil fraud charges under new york state's martin act, cuomo alleging fraud was committed when they weren't told of the massive losses before the vote on the merger and when the parties said they'd walk away from the deal if uncle sam didn't provide billions of aids. lawyers for mr. price and mr. lewis say there's no basis for the case. he's being unfairly vilified for accountability for the meltdown. he stepped down at ceo of the bank last year.

people close to him says he has no intent to settle this case. cuomo's charges made public just about ten minutes after the sec said it's seeking court approval for a settlement with bank of america. having had a $33 million settlement rejected last year, the sec is seeking approval of a $150 settlement over proxy violations including the bank's failure to disclose merrill losses and billions in bonuses paid to merrill employees. attorneyed to koran believes the real loser will be the markets. >> i think that the entities in the market participants ought to be able to accept or expect that there would be continuity of the regulatory approach that they face regardless of whether it's a federal authority or a state authority. >> cuomo's relationship with b of a could be described adds contentio contentious. scott, back to you. >> mary, thanks so much. we have about 45 min touts go before the closing bell,

maria. we're at the lows of the days. reached key technical levels on both the s&p 500 and dow jones industrial average. the nasdaq is weaker even as cisco came in with better than expected earnings. all technology selling off today except for cisco. >> talking to one of the best investors in the market, the cio and founder of pimco is our guest. bill gross will be with us telling us how the sovereign debts in europe may impact the outlook form bonds. after the bell, the euro hitting a seven-month low as investors seek safe havens. answers today at 4:00 p.m. eastern. here is the action on the street. the most troubled and traded stocksality nysc. you're watching first in business worldwide. ♪

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welcome back. let's take a look at the widely held stocks and how they're

trading here. big financials down across the board. we showed you them earlier. also with the exception of cisco, the one unnamed within the dow 30 that's trading earlier. sovereign debt concerns in europe. keeping wall street on edge with a triple digit loss on the cards for the dow. what does the world's biggest bond fund manager have to say about this? we get the insight of bill gross, founder and co-cio at pimco. it's wonderful to have you on the program. >> thank you, nice to be here. >> what are your thoughts about sovereign risk? how serious a threat is this and perhaps a continued marked selloff? >> the sovereign risk is -- the magnitude is not the same as subprimes, but to a certain extent they're similar. the extension, the ultimate of private credit creation, homes, basically selling at $500,000 with zero percent interest rates. greece is basically trading at 12 to 14% deficits, so they're

symbolically the same. to the extent global markets for 12 months have been relevered on the back of government and central bank credit creation, now we're beginning to question the pricing of all risk assets predicated upon that type of phenomenon. >> we're at session lows right here with the dow down 244 points. how are you investing around this? do you think there's real risk that the issues in greece spread throughout the euro zone then bill? >> here is the risk, maria. we don't sense greek is a risk from the standpoint of default. lit be resolved. the risk is in terms of what paul mccully at pimco would say, the will and the wallet of central banks. to the extent leverage has been transferred from private markets to public markets, the ability of public balance sheets -- that speaks to deficits and central banks that have basically been engaging in quantitative easing

procedures in the trillions of dollars, to the extent the will in the wallet is being questioned, these credits, the ter i have ral types of credits probably will reprice. here is the important thing. if they can reprice at hundreds of bases points higher than stocks and high yield bonds and other risk as sets will reprice as well. they all going to ultimately. >> you want to be taking some money off the table then. do you think this persist ins the coming weeks in terms of a market sell-off? >> i think some think of this as a balloon that's been expanded. first of all, we had the private credit expansion that imploded and almost exploded with the subprime in the lehman crisis. now we've had the public reexpansion. to the extent we've expanded in stocks at certain price earnings ratios and high yield bonds at certain narrow yield spreads, then yes, that trade, that

expansion in the balloon basically is over. what we're seeing is, yes, today hedge funds to a certain extent, taking some of the leverage off the table. gold down 5%. oil down 5%. the japanese yen going the other way. everything basically ha that has been predicated upon the dollar carry trade is now at risk. we don't sense that there's significant amount of risk, but we do sense that the expansion, that the used for i don't is over. >> let me ask you this then development you want to be looking at all of the asset classes as far as risk rising bill? we know the commodities have had such a fantastic run over the last year or two. the bond market as well. what do you want to be doing with these asset classes in the face of what likely will be more volatility and perhaps more downside to equities? >> think of this temporarily, maria, because it's not a 12- to 18-month type thing. to the extent the balloon has

expanded in that you want to be at the center, at the koefr, yes, you want to own sovereign bonds in germany and france and canada that basically have low deficits and that aren't at risk in terms of this carry trade and the levered trade that has been taking place. so yes, come back to quality in the bond market certainly and be careful in terms of risk assets on the periphery of the balloon. >> bill, you said earlier in nongtd that if the uk government sticks to its current plan for reducing the budget deficit there's an 80% chance it loses the aaa rating. in your latest note to investors, you even discussed this. you said you would stay clear of uk government bonds. tell me about the dangers there. not all bonds are the saechlt we want to decipher which ones to hold and which to -- >> let me say the uk is not going to default. it's just like greece in that regard. what the uk can do as opposed to greece is basically reflaet and

devalue its currency. to the extent you have uk guilts denominated in pounds, you are at risk not from default but from relation and at risk of devaluation in terms of the principle of your investment. yes, we wouldn't buy a lot of uk gilts. we do own some front end uk possessions. basically if you're at risk fosh reflation or devaluation, it's a must to avoid. >> i assume you don't think u.s. would default either. are the developed ris at risk fosh defaulting? >> they are not at risk of default. the u.s. can print as much money as it wants. the uk can print. japan can print. to the extent these countries can print, there's no rix of default. what they do and what the risk is reflation, higher inflapgs down the road and devaluation of the currency. >> bill, real quick, i know you

haven't discussed the vocal rule publicly. you do have thoughts on this. >> right, we do. we think voelker is headed in the right direction to the extent you can basically move closer to glass steagall, not back to glass steagall. i think that certainly is an advantage. to the point as well, we think banks ultimately can circumvent these types of rules. they're very crafty in doing so and have been experienced in doing so over the past 10 to 20 years. so the ideal from my standpoint is to basically recapitalize these banks such that they have so much capital that they can't possibly put our economic society at risk going forward. >> we'll leave it there. bill, always wonderful to have you on the program. we appreciate your important insights. big gross, founder co-chief investment officer at pimco. we have a market under pressure severely as we approach the final stretch. 35 minutes before the closing

bell sounds. dow jones industrial average at the lows of the afternoon with a decline of 2.5%, about 250 points. it has been a wild week of swings for the market. where are stocks headed from here? we'll take a look and digest what's going on and try to get you -- a leg up for tomorrow's trading session as well as we approach the trade in the final 35 minutes. back in a moment on "closing bell."

welcome back. on top of all the other worries including sovereign debt risk, we have earnings. defense contractor north rupp grumman swinging to a fourth quarter profit of $413 million. the company lost $2.5 billion a year earlier. earnings from continuing operations down and fell short due to weaker than expected sales. consumer products, clorox reporting a better than expected increase, 28% higher in second quarter profit due to the swine flu concerns and it led to a big jump in sales for disinfecting sales. company raced full year guidance. color racks shares down by .5%. an exclusive interview with ceo of clorox. he'll tell us if he's starting to see signs of a comeback.

we want to hear from donald knauss at 4:00 p.m. eastern. it's time for the fast money final call. with wall street tracking towards a new closing low for 2010, where are stocks headed next? to answer that question we have steve grasso, director of institutional sales at stewart franco, also a cnbc market analyst, one of the fast money contributors as well. we're sitting at the lows of the day, broken key technical levels that you have spent day after day talking about on this floor. what does that tell you about where this market is heading? it tells me people don't like the direction of the market at this point. there's no reason to rush into this market. of course, we can get these relief rallies on the way up. but there's no substance to them. i don't see any real volume behind any of these rallies on the way back up. we keep breaking through level by level as you mentioned on the downside. >> it can't be good to close at the lows of the day. i noticed in some of the recent slips we've had in the market, we have been closing at that time lows. >> never good, and never good to

make lower lows. that's what we've seen. looking at 10071 level from last week. we broke through that. the next level is 10065. >> what feeling do you get after talking to your clients all day? you're a trader ton floor, you know what's going on, you talk to people. how does that make you feel? >> there's no reason to stick out and buy this market at this point. there's no reason to put your flag in the sand and buy it here. there's too much risk. >> is this really about sovereign risk? it seems to be an easy target to say this is because of sovereign risk, or is it more sovereign risk, you've got china risk pulling liquidity out of the market, headline risk coming outs of washington and some of the proposed regulations. you tie it all together, job issues as well. >> i think it's everything that you just mentioned. i think china is a huge issue there. we were betting on recovery. china was a big part of that. now it's not. >> something that seems fairly disconcerting to me and certainly has to be for the bulls, if there are any left

after a day like this, tech. cisco comes out with great numbers. a lot of the technology companies have had great numbers. even more sorks to get the kind of commentary we did out of john chambers, he was about as optimistic as you will ever hear a ceo come out of silicon valley. yet, technology is getting hammered today. after a huge runup yesterday. >> chambers always plays it close to his vest. the truth of the matter is people are just running for cover. they don't know where the chips are going to lie, where the smoke is going to clear. you answered another question, why was gold down today? gold cuz considered that fear trade. people took money, wherever they had profiteds, they pulled it out of the market and are waiting to see where the dust settles. that's why guys are selling tech. >> dollar hit ak seven-month high against the euro. risk is off on this market today. is that something that's going to continue? dollar will strengthen,

commodities are getting killed? you mentioned the metals, it's not just gold. >> if you can tell me what's going to happen with portugal and spain, i can tell you where the dollar is going to go. right now it's the best in bad bunch. fear is prevalent in narkt place right now. that is translating to our markets, that's what we're seeing right now. there's no reason to stick your neck out and buy this market until it settles in. >> even though you may look at the current economies that are having some of the sovereign risk and they're seemingly small relative to the large ones, fear is contagious. >> that's right. if you see these spreads widen, that equals fear. fear is going to translate to our economy as well, maybe not today, tomorrow, a month from now. but it asks the tough questions. have we been diligent about spending, and the answer is no. >> steve grasso, stewart frankel wurngs of the fast money contributors. coming up, we'll show you how to protect profits in a sea of red. plus a first on cnbc interview with the ceo of sarah lee,

melissa and the traders are live at 5:00. we have about 25 min touts go here. right at the lows of the day. the dow jones industrial average is off by 241 points. technology is getting crushed as well. the nasdaq is down about 60. >> but cisco is up, signaling enterprise technology spending is, in fact, on the rebound. is now a good time to look at that sector? why is cisco up in the face of weakness elsewhere? we'll take a look at that group when we come right back. stay with us.

we have a market under pressure with final stretch. 20 minutes before the closing bell sounds. let me show you what's going on with the dow jones industrial average down at the lows, down 255 points. worries over the possibility of friction with china. worries over the debt on the balance sheets of government sovereign risk debt. you also have worries about the employment numbers out tomorrow. people are worried we're going to see the number of jobs cut in the last month coming in at the downside of expectations. 10,015 last trade on the dow jones industrial average with the decline of 2.5%. banks down on average between 4% and 5%. bank of america down better than

5%. nasdaq weaker to the tune of 3%. few and far between, cisco is one of them, reporting earnings last week, stock is up 2/3 of 1%. rich peterson at s&p 500 out with a report telling me the s&p 500 may be heading for the fourth straight weekly loss. in the three previous times there was a four-week losing streak n. the following week, equities rallied. scott? >> the outlook for enterprise technology is improving. an optimistic guidance for the year. will technology continue to be a strong point this earnings season and beyond? joining me are marc staalman partner at signal lake ventures and brian marshall senior analyst at broad point tech. mark, what's happening in technology here in that after such a great 2009 where the nasdaq was up 44% despite good earnings from widely held and

large cap technology stocks, these stocks and the nasdaq in general are all but rolling over here? >> that's not unusual. this is actually fairly standard seasonality. the fourth quarter is typically the strongest. intech last year was an exception in so many regards. but, in fact, selling off tech in january, february happens almost every single year. the real question is going to be what happens to enterprise spending and when are we going to see it coming back. i think it will be sooner rather than later. i believe everybody is sandbagging us. >> cisco systems isn't sandbagging, john chambers isn't sandbagging it, brian. he was about as optimistic as you could ask for a technology ceo to be right now looking forward. >> john has a unique seat. his viewing angle is very wide, if you will. so clearly he sees everything getting better. we're about six months in or seven months in to what we feel is a multi-year tech upgrade cycle, especially from an

enterprise infrastructure perspective. we think valuations from pretty attractive. fundamentals clearly accelerating. the market is technically challenged here. this is typical seasonality. reminds me of what happened in 2003 and 2004. 20003 basically a repeat in 2009. and 2004, 2010. we'll have to see what happens in next couple months. we feel pretty optimistic about tech in general. >> the basic premise is once we start to come out of this recession or in the very early stages of the recovery, let's say that's where we are right now, that companies, before they hire people, will go through the upgrade cycle, upgrade technology to boost productivity. you couple that with the commentary you got from chambers, couple that with the kind of results and perhaps maybe a little cautious, but still decent out looks from some of the other big companies like intel, that seems to bode well for technology going forward. >> absolutely. remember what happened last year. people didn't fire their i.t.

staffs, they didn't cancel their projects, they just postponed things. the situation right now is i think going to be a far stronger first half than most have expected. rebel the market research guys, gart ner and idc had it wrong last year and had to revise their numbers down. they got relatively low expectations. ibm microsoft wouldn't give any strong guidance at this point. a lot of people here are actually i think preparing this for upside surprise. >> brian, can you make a differentiation at all between, say, consumer tech and business tech, like a cisco, but the consumer side, say apple and some of these other companies that are selling products directly to consumers? do you draw a line between those two segments of technology and think that one can do better than the other near term? >> sure, yeah. definitely we learned in the downturn was don't underestimate the resiliency of the consumer. clearly if you have good products, consumer electronic products like apple, you'll be a secular grower. conversely, on the enterprise

side right now, there's definitely a need for more equipment. companies underinvested over the last several years. we think inherently there's probably more juice on the enterprise side over the coming quarters. if you're a consumer electronics products company with key products and a secular grower like apple, we think you're going to do very well in addition to the other enterprise guy sgls mark and brian, good to talk to you today, especially on a day when the nasdaq sauf some 3%. we'll catch' you soon. there are about 20 min touts go before the closing bell. maria, we're hovering around the lows here, down 243 on the dow. nasdaq is down 3%. you've got a broad based selloff on the screens we look at here on our desk, the only stock i see in the green is cisco. >> handful of retailers also showing gains. they are far and few between. we have the market threatening to hold on to 10,000 on the dow industrials fractionally above that level. with sovereign debts in europe

spread around the globe or are things not as bad. we heard from bill gross about the possibility of default. we'll talk about that when we come back after this short break.

all right. we have a market deteriorating. it's been the story all day. the market is giving back all of this week's gains following a worse than expected weekly employment report and more concerns out of sovereign debt out of greece. somewhere the employment numbers out tomorrow. joining me now to go behind the move and see what it is happening in terms of your money, cnbc's sue herera, david herera and michelle caruso-cabrera. we got a heads up on the jobless numbers today. there's buzz down here certainly

we're going to see a report coming out as far as the number of jobs cut last month on the low end of expectations. >> or we may see revisions to previous reports. that's one of the things that's pressuring the market, of course, because we have had kind of conflicting reports about exactly where employment is going to fall. and then when the talk of, quote, unquote, revisions came out, it scared people that thought perhaps things are not improving as much as, even though it's been fractional in terms of the number of jobs lost in perspective, they thought it would be better than that. the term revision spooked a number of traders on the floor today. >> interesting big gross comes on the show, david faber, and says we're not expecting any defaults, certainly not from the developed countries like the u.s., japan, britain. yet these worries continue into crease over the amount of debt on government balance sheets. >> absolutely. a lot of people don't want to use the default word. ultimately, maria, that's what this is all about, pricing in increased risk because of the

possibility of default. you're talking about countries where the revenue they're taking in, you know, and the interest expense they are bearing because they issued enormous amounts of debt to try to resuscitate their economies when the markets went south a couple years ago, are very, very large. as much as 50% of revenues in some of these countries going towards interest expense, far more than we have here. we're not exactly doing so well ourselves. that's the ultimate concern. you don't want to talk about default, fine. but there are plenty of people who are and plenty of people out there playing this game by saying, i'm getting out of this market, i'm getting out of the bonds, shorting these bonds. that's what we're seeing. that's the concern. >> not just default, maria. in the last 24 hours the country of portugal tried to raise $500 million in the debt market. they couldn't. they only got $300 million. that is a failed auction. clearly investors around the world are being far more picky about where they're going to put

their money and they're going to demand higher interest rates. that's the bottom line. >> you're absolutely right, michelle. we're talking about a market that is just seeing reaction to this debt, not necessarily an out and out default. we had the president of greece on last week in davos. he was telling us he's trying to get the deficit now at 13% of his country's gdp. he wants to get that deficit down to 3% of the country's gdp, in just two years. we heard president obama's budget yesterday talking about a deficit of some 10% of the overall gdp. these numbers are staggering. investors have figured out that debt is a bad thing. they're reacting to it. even if we don't see that -- >> you're darned if you do and darned if you don't. because when greece says we're going to reduce the amount of debt, what does that mean? that means deep aus stairity. that means people of the country suffer, recessions, they default on loans. >> if you want to stay in the

debt, maria, you have to pay up for the insurance to insure the debt which is why we watch those cds swaps. they widened out dramatically. we have some of the bipg guest movers today, the usual suspects which you talked about. we included ireland on that list, and then the uk would be right under that. that's one of the big worries is a fracture of the european union, in essence, because of these debt issues. ireland and the uk are the two linchpins for a lot of u.s. companies. >> how do you protect yourself? >> what you're looking at, the cds rate is important because, as it widens out, as you see the numbers on the right-hand side get big ter, plus 20, plus 30, plus 50, it costs you more to buy insurance to insure your debt. >> how do we read that? you have to spend $422,000 to ensure $1 million worth of greek debt. >> right. >> we should point out that the volume is in the bond market. cds is a barometer of what is going on in terms of the cash

spread between the jer madison square garden bond and everybody else's bond. >> it's the psych logical impact of seeing that number get bigger that spookes the market, and it creates that vicious cycle of the, quote, unquote, death watch. >> which we saw in 2008 with so many of our own financial companies. >> right. >> maria, the eu yesterday said we got a fix on greece. we're all set. the market hasn't believed it. that could be an important inflection point where ultimately invifters have said we're not buying it. what is the eu going to do now? >> what about the employment numbers? let me switch gears and ask you what you've been hearing, david, michelle, sue, as far as the numbers tomorrow. >> there's still hope that maybe it's the first time we see positive growth. there's been some pull back in that expectation. i think if you have to start worrying about constricted spending all eefr the world, regardless of the number tomorrow, you have to worry about whether or not you get a double-dip recession. >> sue?

>> what i'm hearing is people don't trust the fact that the numbers are actually reflecting what's going on on main street. and as a result of that you have a lot of workers who have dropped out, who are no longer looking. a lot of those people will not be reflected in those roles. there's increasing doubt about the validity of the number itself. that's created hedging in this market ahead of that report. >> thanks very much. we appreciate it. the s&p 500 falling more than 2% today. up next, matt nesto will tell us how stocks could react to that kind of selloff tomorrow. back in a moment.

the s&p 500 down better than 30 points. this is the sixth time in six months that the s&p has dropped more than 2% in sangal session. it broke a number of critical levels here.

it broke 10,071 and now it broke 10,065. people are looking to these levels for support. let's look back to see what history tells us about tomorrow, let alone next week. mat nesto has been looking backwards to find clues. matt, what are you seeing and how significant in your view is that break in support in 10,065? >> it's going to be significant. but 10,035 is more significant. that marks actually 10%. until we get there, these milestones down, they hold until they don't. this is the sixth time in six months that we've had a drop of 2% or more in the s&p 500. interestingly, if you take a look at what's been going on and with the chart, each time within a week we had succumbed or eclipsed where we were prior to it. that, of course, speaks to a bull market that we had. if you take a look at the longer the selloff, the sharmer the rebound, in many cases it wasn't the last day. it wasn't the biggest drop, but

it was one step in a multi-phased decline, kind of like what we're seeing right now. tomorrow we have the jobs data. >> matt, thanks very much. we have the closing bell coming up right after this short break. the algae are very beautiful. they come in blue or red, golden, green. algae could be converted into biofuels... that we could someday run our cars on. in using algae to form biofuels, we're not competing with the food supply. and they absorb co2, so they help solve the greenhouse problem, as well. we're making a big commitment to finding out... just how much algae can help to meet... the fuel demands of the world.

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welcome back to the floor of the new york stock exchange. a global selloff has culminated with our markets seeing the worst selloff in weeks. the dow jones industrial average is about to break the 10,000 level. there it goes. 9,998, the first time since november that it has done that. there is the bell. maria picks you up with the closing bell, again, dow under 10,000. it is 4:00 on wall street. do you know where your money is? welcome back to "closing bell." a busy edition, stocks suffering their biggest one-day drop since october. the market under 10,000 on the douchlt wall street is worried today about greece and the debt load, whether greece, portugal and stain will be able to pay their debts. the dollar soars on the news. the dow back below 10,000, as

you can see, down 271 points, at the lows of the day, at the close with a decline of 2 3/3%. cnbc's bob pisani, brian shactman, due herera, ceo of richard person steel capital management. the dow jones industrial average on the downside in the triple digits at the lows of the afternoon at 4:00, as you can see, here is a chart at 9999, the market slipping below that key 10,000 mark, breaking certain resistance and support levels, not only on the dow, but the s&p 500 as well. nasdaq gave up 3% today even though there were bright spots on the upside. for example, cisco was higher on the heels of better than expected earnings. s&p 500 down to 10,062. we talked earlier that the next